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Spy scandal close to home

Dominique SchwartzUpdated
Sun 4 Aug 2013, 7:30 AM AEST

After Snowden, Assange and PRISM, New Zealand finds itself caught in its own spy drama; calls are mounting for an independent inquiry into the country's intelligence services after revelations that journalists' phone calls have been monitored and private records handed to third parties.

Transcript

ELIZABETH JACKSON: Intelligence leaks, spying, and privacy issues are making headlines around the globe, as Bradley Manning undergoes sentencing in the US, Julian Assange continues his asylum in the Ecuadorian embassy in Britain, and Edward Snowden melts into hiding in Russia.

New Zealand is caught up in the drama too, with calls mounting for an independent inquiry into the country's intelligence services after revelations that journalists' phone calls have been monitored and private records handed to third parties.

Also uncovered - a Defence Force manual which refers to investigative journalists as subversives.

Here's our New Zealand correspondent Dominique Schwartz.

DOMINIQUE SCHWARTZ: If there's one thing a spy agency doesn't want, it's to be in the headlines.

For New Zealand's Government Communications Security Bureau, the GCSB, covert became overt after the 2012 raid on internet entrepreneur Kim Dotcom. Dotcom's legal fight against extradition to the United States for alleged copyright piracy has opened a can of worms for the country's intelligence services. A judge ruled that not only was the police raid on Dotcom's mansion illegal, so too was GCSB surveillance of Kim Dotcom.

Opposition parties demanded a full inquiry. Instead, the prime minister asked his cabinet secretary to review the spy agency. Her report was leaked to Fairfax journalist Andrea Vance, prompting another inquiry to find the leaker. Parliament was assured the phone records of Ms Vance had not been accessed, but this week the Speaker of the House apologised, saying he'd been wrong. Ms Vance's parliamentary phone calls over a period of three months and electronic monitoring of her movements around the building had been given to the inquiry by a contract group, Parliamentary Services - but on whose say-so?

The inquiry's head said he never asked for the information and never looked at it. The prime minister John Key says he didn't, but the Opposition's not buying it, particularly as it seems John Key's chief of staff actively pursued the phone records of MPs.

In an opinion piece this week, the journalist at the centre of it all says statements by both the prime minister and the inquiry's head ring hollow. Ms Vance says she's "mad as hell" that her "confidential details [have been] hacked and shared around" and that "press freedom has been cast aside".

As an isolated incident, it would be worrying enough, but it comes amid questions over the Defence Force and its disparaging view and treatment of some reporters.

Jon Stephenson is a New Zealand journalist who's been working in Afghanistan and filing for media organisations around the world. He's just taken the head of the New Zealand Defence Force to court for defamation. In articles published in 2011, Mr Stephenson described how New Zealand SAS (Special Air Service) soldiers transferred Afghan detainees to authorities who then tortured them. He based those stories on an interview with a particular commander. New Zealand's military chief subsequently denied the reporter had interviewed the commander or entered the base where the interview supposedly took place. But during defamation proceedings, Lieutenant General Rhys Jones did a U-turn, accepting that Mr Stephenson had visited the base and done the interview. While the jury was unable to reach a verdict on defamation, Mr Stephenson is claiming a moral victory.

There've been few wins for the Defence Force in the wake of that court case, with further damaging allegations. Investigative journalist Nicky Hager says the New Zealand military received help from US spy agencies to monitor the phone calls of Jon Stephenson in Afghanistan, and that officers from the New Zealand intelligence agency GCSB were probably involved. The government and military have done their best to refute those claims.

What they haven't denied is Nicky Hager's other revelation - that a 2003 Defence Force security manual puts some reporters into the same category as terrorists. It says the main subversive threats are: foreign intelligence services, organisations with extreme ideologies, and "certain investigative journalists".

The government's response to the whole murky mess has been to press ahead with changes to the law covering the GCSB, effectively broadening the spy agency's powers so that what was illegal in the Dotcom case would be legal in future. Opposition parties say a royal commission should be held into all of the intelligence services before any laws are changed, but with the government now having secured the one extra vote it needs to pass the bill, that's unlikely.